CALGARY - The Alberta-centred petroleum industry will add $3.6 trillion to Canada's gross domestic product and create nearly one million additional jobs over the next 25 years through the investment of $1 trillion, a study by a Calgary think-tank suggests.
In what it is describing as the most comprehensive study of its kind, the Canadian Energy Research Institute on Thursday said that good times in the oil industry will spill over to the rest of the economy.
"What we really show is that whether it's tight gas development in British Columbia or oilsands development in Alberta or natural gas and oil development offshore Eastern Canada, it truly benefits all parts of Canada," said research vice-president Peter Howard.
CERI, whose members include the federal and provincial governments, the University of Calgary and about 100 energy-related companies, intends the study to affect public policy, he said.
"I think everybody should read this. Environmentalists should read it because it'll let them see what the size of the prize is here for the petroleum industry and hopefully it will provide some insights into realizing that there are always trade-offs with anything, so it's important to think, if we do one thing, what's the impact on something else."
He said the risk some projects may not proceed because of environmental concerns is incorporated into the figures.
Simon Dyer, oilsands director for the environmental group Pembina Institute, said CERI presents a "false choice" between economic benefits and the cumulative affect of oil and gas development.
"Canadians recognize the economic importance of the oil and gas industry and particularly the oilsands industry but they expect that development will occur in a more responsible way," Dyer said.
He said the report does a good job of presenting benefits, but doesn't look at the costs of not acting to prevent climate change and pollution.
The study suggests that $218 billion will be invested in new oilsands capacity over the next 25 years as output of bitumen increases to 4.3 million barrels per day.
The oilsands production would result in $1.7 trillion in incremental GDP growth for Canada, $78.1 billion alone for Ontario and Quebec, the study concludes, adding it translates into 700,000 jobs being created across the country and additional tax revenues for Canada of over $306 billion.
When conventional gas and oil developments, plus LNG (liquid natural gas) development, pipelines and offshore facilities are added in, the industry will boost Canada's GDP by $3.6 trillion ($144 billion in Ontario alone)and will create 980,000 new jobs, contributing additional tax revenue of $429 billion in Canada.
The economic benefits would be greatest in Alberta, which would gain $2.6 trillion in GDP growth and 560,000 of the jobs.
The study assumes an average oil price of $100 US per barrel and a Henry Hub natural gas price of $9 US per million British thermal units in 2008 dollars over the next 25 years.
"It's higher than it is today, but over the next 25 years, $100 oil is going to be the norm. It's hard to imagine it will be less than $100," said Howard, noting that gas will remain low for the next few years before gradually rising to the $10 to $12 range in the 2020s.
Howard said the numbers in the study are lower than they would have been had they been compiled two years ago.
"I think we are more conservative now. If you go back two years ago I think we were looking at (forecast) $125 oil ...What we're looking at now is definitely curtailed quite a bit and more reflective of a lingering recession."
Greg Stringham, a vice-president with the Canadian Association of Petroleum Producers, welcomed the report.
"The CERI economic impacts study just quantifies the cross-country trend we have been seeing as the oil and gas industry continues to provide employment . . . using a wide variety of businesses across Canada," he said.
"This study demonstrates how the oil and gas sector helps drive the Canadian economy and also provides revenues to provincial and federal governments."
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